BoJ ready to add to stimulus, Kuroda says

The Governor of the Bank of Japan, Haruhiko Kuroda, said the central bank was ready to add to its monetary stimulus if necessary in order to meet its inflation target.

Speaking at an annual meeting of trust banks Kuroda on Monday, Kuroda reportedly said that, "global financial markets remain unstable as investors are becoming increasingly risk-averse due to uncertainty over the outlook of emerging and resource-exporting economies."

"The BOJ won't hesitate to take additional easing steps if needed to achieve its inflation target."

His remarks followed a surge in the value of the country's currency against the US dollar.

On 8 April, the US dollar/yen hit 107.67, its strongest since 31 October 2014, the day before the BoJ surprised markets with an expansion of its monetary stimulus programme.

Some analysts attributed the gains in that currency pair to the reduction seen in the real (inflation adjusted, that is) interest rate differential between the two countries if one looks to the yields on 10-year benchmark government debt from each of their governments.

More recently, the real interest rate spread had narrowed as market expectations for the Fed's policy were downgraded and - possibly - given the perceived difficulties for the BoJ to keep lowering its already negative policy interest rates.

For analysts at Socgen it was the drop in Japanese inflation expectations which had triggered the rise in the currency against the Greenback, as real yields rose in comparison to those in the US.

As of 11:11 BST US dollar/yen was edging higher by 0.03% to 108.13.